You can withdraw money from your account for any reason. If it’s used for Qualified Disability Expenses, there is no tax on the earnings portion of the withdrawal. See the list of approved categories of Qualified Disability Expenses for more details.
You can also sign up for an ABLE prepaid card, load money from an ABLE United account and use it online or in stores all over the U.S.
If the money in an ABLE United account is spent on one of the following Qualified Disability Expenses, as defined by federal law, the earnings on the money withdrawn are tax-free. Some of these expenses include: health, education, housing, transportation, legal fees, financial management, employment training and support, assistive technology and personal support services, oversight and monitoring, funeral and burial, and other expenses approved by Treasury regulations.
Qualified Disability Expenses include basic living expenses and are not limited to items for which there is a medical necessity or which solely benefit the Beneficiary.
As long as the expense relates to the Beneficiary and helps maintain or improve their health, independence, or quality of life, it can be considered a Qualified Disability Expense. Please read the Program Description & Participation Agreement for more information on Qualified Disability Expenses.
If asked by the IRS or Social Security Administration, for those receiving SSI, the Beneficiary or Authorized Legal Representative is responsible for providing receipts for Qualified Disability Expenses.
Yes, you can use money from an account for housing expenses. If you’re receiving SSI, the money must be used within the month it was withdrawn so it does not affect your SSI eligibility.
Keep your receipts and documentation for all eligible expenses in case the IRS wants to see them or, if receiving SSI, the Social Security Administration. We don’t need proof of your expenses, but you should have it for your records.
If you sign up for an ABLE Prepaid Card, you can review and manage your card activity from your online account. This will help keep track of your purchases, but you should still save your receipts.
If withdrawals from the account for the calendar year exceed the Qualified Disability Expenses, the individual may be subject to income tax, plus an additional 10% penalty. Consult a tax professional for additional guidance.
A withdrawal used for a non-eligible expense could affect your eligibility for SSI benefits, Medicaid or other means-tested benefits under federal or state programs. A withdrawal that is applied to a housing expense in any month after the month of the withdrawal could impact SSI benefits.
No. Having an ABLE United account doesn’t count towards your eligibility for Medicaid, regardless of the amount saved in the account.